Ochs-Sulzberger Family Narrows NYT Stake

The Wall Street Journal's Keach Hagey shrewdly notices that the Ochs-Sulzberger family's economic stake in the New York Times company has declined to a mere 13 percent, from 19 percent as recently as 2010.

A Times company spokesman who spoke to the Journal attributed the decline to "estate planning and long term estate taxes." (I will resist the temptation to make a smart-aleck remark here about the Times editorial position on the estate tax.)

It does raise certain questions about the candor of the newspaper's $5.3 million a year chairman, Arthur Sulzberger Jr., who is running around town granting breakfast interviews emphasizing the point that the Times is not for sale. In fact six percent (the difference between 19 percent and 13 percent) of the New York Times Company at today's prices is worth about $146 million. So the family was willing to sell $146 million worth of the Times Company — they just don't want to give up any control for that money. They're selling while insisting it's not for sale! It's the best of both worlds (or the worst, depending on how you see it).

It also raises the question of how long the paper's non-family shareholders will want to hang around if the family's economic ownership continues to decline but its control over the company's governance remains intact. It looks like the family was willing to find a taker for about $146 million worth of its shares with that proposition, but there's probably some limit to it. If someone came along offering $300 million for the rest of the Ochs-Sulzberger family's economic stake in the business, that person making the offer would almost certainly want some control in exchange for the money, or at least the right to take control at some time in the future.

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